Napster see their competitors for online music services in the US as Apple Computer's iTunes, Amazon, RealNetworks, Inc.'s Rhapsody, Yahoo! Unlimited, Sony Connect, AOL Music, MusicNet and MusicNow. In the UK, in 2005, new services with a subscription model were launched by retailers HMV and Virgin. They expect other competitors such as MTV Networks to enter the market soon.

Napster (2005) believe that the main competitive factors affecting their market include programming and features, price and performance, quality of customer support, compatibility with popular hardware devices and brand.

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